Trade with NI: Windsor Framework Delay
- Arne Mielken
- Sep 20, 2024
- 9 min read
The Delay of the Windsor Framework implementations: Discover how the recent delay impacts your customs operations
What Questions We Will Answer in this Blog:
Why has the implementation of the Windsor Framework been delayed?
What are the implications of this delay for importers and exporters?
How can businesses prepare for the upcoming changes effectively?
Introduction
Staying informed about regulatory changes is vital in customs and international trade. The recent announcement regarding the delay of the Windsor Framework for goods movement between Great Britain and Northern Ireland has significant implications for customs professionals, importers, and exporters alike. Understanding this delay and its consequences can help you navigate these turbulent waters effectively.
"In customs, clarity is key. Delays may create uncertainty, but informed professionals can turn challenges into opportunities." — Arne Mielken, Managing Director of Customs Manager Ltd
What is the Windsor Framework?
On 27 February 2023, the UK and EU agreed on the Windsor Framework, introducing a fundamentally new set of arrangements to address critical issues stemming from the original Northern Ireland Protocol.
It constitutes a comprehensive set of joint solutions aimed at definitively addressing the practical challenges faced by citizens and businesses in Northern Ireland, thereby providing them with lasting certainty and predictability.
The joint solutions cover new arrangements on customs, agri-food, medicines, VAT, and excise, as well as specific instruments designed to ensure that the voices of the people of Northern Ireland are better heard on issues particularly relevant to their communities.
It establishes a new legal and constitutional framework that changes the text of the treaty and eliminates a range of EU rules.
This framework focuses on six key areas:
Restoring Trade Flow: The Windsor Framework aims to restore the smooth trade flow within the UK internal market by removing burdens that have disrupted East-West trade. This is crucial for maintaining seamless economic activity between Great Britain and Northern Ireland.
Safeguarding Northern Ireland's Union Status: The agreement reaffirms Northern Ireland’s place in the Union, ensuring that businesses in the region can operate effectively while still benefiting from access to both the UK and EU markets.
Addressing the Democratic Deficit: The framework tackles the democratic deficit that was a central concern of the original Northern Ireland Protocol, ensuring that the voice of Northern Ireland’s citizens and businesses is better represented in the decision-making process.
Keeping the EU Market together and safe: The arrangements have robust safeguards to ensure the integrity of the EU’s Single Market, to which Northern Ireland has unique access.
Benefit for NI businesses: Northern Ireland’s businesses have full, unconditional, and unfettered access to their most important market in Great Britain while retaining privileged access to the entire EU market.
Peace: This new approach restores the necessary balance to uphold the Belfast (Good Friday) Agreement in all its dimensions.
These arrangements were formally adopted at the Withdrawal Agreement Joint Committee on 24 March 2023.
Why has the Implementation of the Windsor Framework been delayed?
The government had initially planned for the Windsor Framework to take effect on 30 September 2024. This framework was designed to streamline the movement of goods and reduce trade barriers between Great Britain and Northern Ireland.
Key features of the original implementation
Customs changes for freight movements from Great Britain
As part of the Windsor Framework, goods entering Northern Ireland will follow two lanes: a green lane for goods staying in Northern Ireland, requiring minimal checks and paperwork, and a red lane for goods that may enter the EU, which will be subject to stricter checks and additional documentation.
This was supposed to start on 30 September 2024.
By that date, UKIMS-authorised traders would only be able to move goods through the green lane using a simplified green lane dataset.
The new streamlined approach breaks down the essential data required for customs procedures into three main categories:
This simplified dataset replaces the need for a lengthy supplementary declaration after the goods arrive in Northern Ireland, streamlining the customs process and reducing administrative burdens. The data can be submitted before the movement of goods, drawn from existing commercial information, enabling efficient movement through the green lane.This simplified dataset replaces the need for a lengthy supplementary declaration after the goods arrive in Northern Ireland, streamlining the customs process and reducing administrative burdens. The data can be submitted before the movement of goods, drawn from existing commercial information, enabling efficient movement through the green lane. |
Goods Profile for Simplified Customs
A key feature of the new system is the use of a 'goods profile'. Traders will no longer need to provide detailed commodity codes for each movement. Instead, they will create a unique profile that lists the goods they typically move, linking simple descriptions of goods to relevant codes for real-time risk analysis.
Existing UKTS traders will have their goods profiles automatically populated based on past movements.
New traders will go through an easy process to create their profile.
Traders are responsible for maintaining and updating their profile, ensuring it accurately reflects the goods they move.
In most cases, only six-digit codes will be required, with the exception of certain goods, like live animals, which may require eight-digit codes. This is a significant reduction from the current ten-digit code requirement.
Enhanced UK Trusted Trader Scheme and Compliance
To be authroised under the UK Internal Market Scheme (UKIMS) businesses must meet additional obligations, such as:
Record-keeping: Businesses must retain records of goods movements for at least five years, allowing for cross-checks between purchases, sales, and stock control.
Client understanding: Businesses must ensure their clients meet the UKIMS criteria through contracts, declarations, and regular reviews of evidence of sales.
Data-sharing and audits: The UK government will audit UKIMS holders and report to the EU, ensuring satisfactory controls are in place. Failure to meet these obligations could result in the imposition of EU customs duties and penalties.
Now, this system will not be rolled out until Spring 2025.
Changes for Parcel Movement from Great Britain to Northern Ireland
As part of the Windsor Framework, significant changes to the arrangements for sending parcels from Great Britain to Northern Ireland were scheduled to take effect on 30 September 2024. Under these new rules, parcels would be treated differently depending on whether they were sent to or from private individuals or businesses.
Private Individuals:
Private individuals in Northern Ireland will be able to receive parcels from friends, family, or businesses in Great Britain without customs declarations, tariffs, or presentations to customs authorities. This means smooth and hassle-free deliveries for personal use.
Business to Consumer (B2C) and Consumer to Business (C2B) Movements:
Businesses sending parcels directly to private individuals in Northern Ireland will not need customs declarations. Carriers will collect data for HMRC, ensuring compliance without imposing additional burdens on businesses.
Consumer to Consumer (C2C) Movements:
Private individuals sending parcels to one another for personal use will also be exempt from customs declarations, provided the goods comply with weight limits and other criteria.
Business to Business (B2B) Movements:
B2B parcels will follow the standard freight processes. Companies must adhere to the UK Internal Market Scheme (UKIMS) and meet specific criteria.
Importantly, these new parcel arrangements will not be implemented until 2025. Further information on the timeline will be provided in due course.
What are the Implications of this Delay for Importers and Exporters?
For customs professionals and businesses engaged in international trade, the delay presents both challenges and opportunities.
1. Uncertainty and Planning Challenges: The postponement creates a sense of uncertainty regarding compliance deadlines. Businesses must remain vigilant and adaptable, revisiting their strategic plans to ensure they can pivot as necessary.
2. Resource Allocation: With the new effective date now projected for 31 March 2025, organisations should assess their resources. This could involve reallocating budget or manpower towards ensuring compliance with the new arrangements when they do come into effect.
3. Continued Engagement: Fostering communication with stakeholders is crucial. Regular updates from government bodies and industry associations can help businesses stay informed about further developments.
How can Businesses Prepare for the Upcoming Changes Effectively?
Preparation is essential in light of these delays. Here are some actionable steps:
1. Enhance Your Knowledge Base: Invest in training programs focused on the Windsor Framework and related customs regulations. Understanding the changes will equip your team to adapt more quickly when new arrangements are implemented.
2. Monitor Updates: Keep an eye on announcements and guidelines from HMRC and other relevant bodies. This will help you anticipate future requirements and align your processes accordingly.
3. Collaborate with Experts: Engage with customs consultants or professionals who can provide tailored advice based on your specific business needs. Their expertise can be invaluable in navigating compliance challenges.
4. Implement Flexible Systems: Prepare your internal systems for potential changes by incorporating flexibility. This ensures that you can adjust to new regulations without significant disruption to your operations.
Arne’s Takeaway
The delay of the Windsor Framework serves as a reminder of the complexities involved in customs regulations. As customs professionals, we must remain proactive and adaptable in our approach. Embrace the uncertainty, and use this time to prepare your operations for the future. Stay informed and engaged to ensure that you are ready to meet compliance requirements when the new arrangements are finally implemented.
Expert Recommendations
Stay updated on the latest government announcements regarding the Windsor Framework.
Invest in training for your team to ensure everyone is well-versed in the upcoming changes.
Consider consulting with customs professionals to align your practices with new requirements.
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About the Author
I, Arne Mielken, am a customs, export control, and sanctions expert with over 20 years of experience. I have worked as an executive director for many years in Big 4 consultancy, global trade management technology companies, and many international trade and export UK and EU trade associations. I am proud to be a Freeman of the City of London and a Liveryman of the Worshipful Company of World Traders and I am a member of many customs, export control, and sanctions associations.
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Disclaimer
The information provided in this blog post is for educational purposes only and should not be construed as legal advice. Consulting with legal professionals, specialists, or specific compliance requirements and guidance are recommended. Book a free call with our expert at Customs Manager Ltd.
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